Section 201 Banks by State

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​Section 201 of the recently enacted Economic Growth Act requires the three banking regulators to issue a rule creating a “Community Bank Leverage Ratio,” set between 8 and 10 percent. If a community bank is above the set ratio, it will be deemed to be in compliance with risk-based capital requirements, such as Basel III. Through this Section of the Act, Congress and by extension the Agencies recognize that many banks maintain such high levels of capital that the complex Basel III calculations yield no additional supervisory or safety and soundness benefits.

The agencies are in the process of developing a proposal to implement Section 201, and are currently debating the appropriate level of the ratio. ABA analysis indicates that 8 percent is the right number.